Over the past nine months, the Trump administration has imposed sweeping new tariffs on imports from most of the world. This includes key products, such as steel and aluminum. Starting next month, more tariffs are promised on semiconductors, pharmaceuticals, furniture, and other products.  

These measures have frayed our alliances, disrupted supply chains, and increased costs for U.S. firms and consumers. To be clear, these tariffs are effectively a tax increase for businesses and families. The Budget Lab at Yale estimates the 2025 tariffs will increase prices by 1.7 percent in the short run, the equivalent of an average per household income loss of $2,400 by year’s end.  

These tariffs have generated a windfall of new tax revenues that deserve deliberate and strategic use. To understand the scale, consider the following: before the 2025 tariff surge, the U.S. average effective tariff rate stood at 2.4 percent. Estimates are that by the end of September, consumers faced an average effective tariff rate of 17.9 percent, the highest since 1934. 

In September, the U.S. government collected $31.3 billion in tariff revenue, bringing the total for the year to $214.9 billion. For comparison, the U.S. collected $77 billion in tariff revenue during fiscal 2024. In other words: the government is now collecting tariff revenues at a pace far higher than at any point in recent memory. 

Even if the administration loses the Supreme Court case challenging their International Emergency Economic Powers Act or “national emergency” tariffs in November, the president has already announced a new list of trade cases that will likely impose new tariffs.  

These tariffs are hitting at a particularly vulnerable time. Unemployment is creeping up, in part because of the tariffs, but largely due to the growing impact of automation and other new technologies in the marketplace.  

The administration has floated uses for the tariff revenue that range from compensating farmers hurt by tariff retaliation, a self-imposed injury, to paying down a very small part of the $3.5 trillion increase in the fiscal deficit caused by the “Big Beautiful Bill” passed earlier this year.  

A more focused, high-impact option would be to deploy these revenues to benefit American workers by upgrading the American workforce. The U.S. today has a mismatch between jobs available and skilled workers to fill those jobs. As of July 2025, manufacturing job openings climbed to 437,000, with predictions that by 2028 up to 2.4 million manufacturing jobs may go unfilled. As technologies such as AI and robotics move into the mainstream, there are predictions of an even greater disruption in the economy and job market, and a greater gap in skilled workers. 

Congress and the administration should commit to investing this large stream of tariff revenue in a landmark program of workforce skilling and apprenticeships designed to prepare workers for the coming economic and technology shifts in the job market. Upskilling the U.S. workforce will also reduce income inequality and boost the middle class, all while making the U.S. more globally competitive.  

A share of the tariff revenue stream should also be used to both reinstate and expand Trade Adjustment Assistance, a program that lapsed in 2022, which was specifically designed to compensate and upskill workers hurt by trade.

The American Leadership Initiative is focused on developing policies that will advance the American economy and its workers for the 21st Century. While the administration’s tariff policy doesn’t further that goal, the availability of abundant tariff revenue is a unique opportunity to better position American workers the future.  

Orit Frenkel, Ph.D., is CEO of the American Leadership Initiative.

, 2025-10-11 19:00:00, , TheHill.com Just In, %%https://thehill.com/wp-content/uploads/sites/2/2023/03/cropped-favicon-512px-1.png?w=32, https://thehill.com/homenews/feed/, Orit Frenkel, opinion contributor